In terms of global anti-bribery compliance, charitable contributions or gifts of one form or another require special scrutiny. Many entities may be motivated by entirely laudable reasons and a sense of corporate responsibility. They may also seek to foster goodwill and, in turn, greater receptivity to permitting them to do business in a particular foreign setting.
Whether it is, among others, the FCPA, the UK Bribery Act, Canada’s Corruption of Foreign Public Official’s Act (“CFPOA”), or Brazil’s Clean Companies Act, making charitable contributions is not necessarily prohibited by most anti-bribery legal regimes. However, if a charitable contribution or gift is used as a mechanism to in some way improperly influence a foreign public official, they may well constitute a violation. The indirect nature of an attempt to influence a foreign public official is no defense.
When charitable contributions or gifts are involved, an important consideration will be whether a foreign public official will benefit from the contribution or indirectly control to whom the beneficiaries of the contribution may be. Much like payments to third parties, due diligence should be undertaken to gain an understanding of the recipient of the contribution to be assured that it is not being used as a vehicle to influence a foreign public official.
This can be a daunting task. The ways in which the real purpose of a “charitable contribution” may be camouflaged are almost endless. Often it may be a friend or a relative of a foreign public official who is in a position at the charitable organization to redirect the contributions to those who the foreign public official may seek to influence and thereby benefit. One just never knows.
As much as third-party consultants, global anti-bribery compliance programs must address charitable contributions or gifts. The greater the degree to which care is exercised before making the charitable contributions or gifts, problems are less likely to arise. Moreover, the greater the degree of transparency associated with a charitable contribution or gift, the less likely will a charitable contribution or gift be later perceived as an improper inducement.